As the Federal Reserve's statutory objectives are defined as specific goals for the U.S. economy-to pursue maximum sustainable employment and price stability-and its policy decisions are targeted to achieve these dual objectives, there might seem to be little need for its policymakers to pay attention to developments outside the United States. But such an inference would be incorrect: the state of the U.S. economy is significantly affected by the state of the world economy, and of course, actions taken by the Federal Reserve influence economic conditions abroad, which in turn spill back on the evolution of the U.S. economy and therefore must be taken into account in the Federal Reserve's monetary policy choices. This Per Jacobsson Lecture first reviews the effect of the Federal Reserve's monetary policies on the rest of the global economy, particularly emerging market economies. It then addresses prospective outcomes and possible risks associated with the normalization of the Federal Reserve's policies. Finally, it discusses the Federal Reserve's responsibilities in the world economy.

Furceri, Davide, StéphanieGuichard, and ElenaRusticelli. (2011). “Medium-Term Determinants of International Investment Positions: The Role of Structural Policies.” Economics Department Working Paper Series 863. Paris: Organisation for Economic Co-operation and Development, May.

Glick, Reuven, and SylvainLeduc. (2013). “The Effects of Unconventional and Conventional U.S. Monetary Policy on the Dollar.” Working Paper 2013-11. San Francisco: Federal Reserve Bank of San Francisco, May.

Stanley Fischer

Stanley Fischer has been Vice Chairman of the Board of Governors of the Federal Reserve System since June 2014. Prior to his appointment to the Board, he was governor of the Bank of Israel from 2005 through 2013. He previously served as Vice Chairman of Citigroup, First Deputy Managing Director of the IMF, and Chief Economist of the World Bank, following a career in academia that spanned more than two decades, chiefly at the Massachusetts Institute of Technology (MIT).

Dr. Fischer has published many articles on a wide variety of economic issues, and he is the author and editor of several scholarly books. He has been a fellow at the Guggenheim Foundation, the American Academy of Arts and Sciences, and the Econometric Society, as well as a research associate at the National Bureau of Economic Research and an honorary fellow at the London School of Economics.

Dr. Fischer was born in Lusaka, Zambia, in October 1943. He received his B.Sc. and M.Sc. in economics from the London School of Economics. He received his Ph.D. in economics from MIT in 1969. He is married with three adult children.

The Per Jacobsson Lectures

2014

The Federal Reserve and the Global Economy. Lecture by Stanley Fischer.

The Per Jacobsson Lectures are available on the Internet at www.perjacobsson.org, which also contains further information on the Foundation. Copies of the Per Jacobsson Lectures may be acquired without charge from the Secretary. Unless otherwise indicated, the lectures were delivered in Washington, D.C.

The Per Jacobsson Foundation

Founding Honorary Chairmen:

Eugene R. Black

Marcus Wallenberg

Past Chairmen:

W. Randolph Burgess

William McC. Martin

Sir Jeremy Morse

Jacques de Larosière

Sir Andrew Crockett

Past Presidents:

Frank A. Southard, Jr.

Jacques J. Polak

Leo Van Houtven

Caroline Atkinson

Nemat (Minouche) Shafik

Founding Sponsors

Hermann J. Abs

Viscount Harcourt

Jean Monnet

Roger Auboin

Gabriel Hauge

Walter Muller

Wilfrid Baumgartner

Carl Otto Henriques

Juan Pardo Heeren

S. Clark Beise

M.W. Holtrop

Federico Pinedo

B.M. Birla

Shigeo Horie

Abdul Qadir

Rudolf Brinckmann

Clarence E. Hunter

Sven Raab

Lord Cobbold

H.V.R. Iengar

David Rockefeller

Miguel Cuaderno

Kaoru Inouye

Lord Salter

R.v. Fieandt

Albert E. Janssen

Pierre-Paul Schweitzer

Maurice Frère

Raffaele Mattioli

Samuel Schweizer

E.C. Fussell

J.J. McElligott

Allan Sproul

Aly Gritly

Johan Melander

Wilhelm Teufenstein

Eugenio Gudin

Donato Menichella

Graham Towers

Gottfried Haberler

Emmanuel Monick

Joseph H. Willits

Board of Directors

Guillermo Ortiz —Chairman of the Board

Abdlatif Y. Al-Hamad

David Lipton

Nancy Birdsall

Alassane D. Ouattara

Jaime Caruana

Shigemitsu Sugisaki

Malcolm D. Knight

Edwin M. Truman

Horst Köhler

Marcus Wallenberg

Christine Lagarde

Officers

David Lipton

—President

Kate Langdon

—Vice President and Secretary

Thomas Krueger

—Treasurer

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